Vehicle Expenses for Canadian Real Estate Agents (2026)

How CRA works out the deduction

Per CRA, when a vehicle is used for business and personal driving, only the part of its expenses paid to earn income is deductible, supported by a record of the total kilometres driven and the kilometres driven to earn income.[3]

CRA's own example: 27,000 kilometres driven to earn income out of 30,000 in total, with $7,000 of vehicle expenses for the year. (27,000 ÷ 30,000) × $7,000 = $6,300 deductible[1].

That business part goes on line 9281 of Form T2125, which CRA titles "Motor vehicle expenses (not including CCA)"[9]. Capital cost allowance on a vehicle you own is claimed separately, on line 9936[1][9].

Per CRA, parking fees related to business activities and supplementary business insurance for the vehicle are deductible in full, not by the business-use share.[1]

For every T2125 line that applies to a real estate agent, see the guide to real estate agent business expenses in Canada. This article covers the vehicle lines.

CRA's logbook, and the simplified logbook

The full-year logbook

Per CRA, the best evidence of a vehicle's business use is a logbook of business travel kept for the entire year. For each business trip it lists the date, destination, purpose and kilometres driven, and it has each vehicle's odometer reading at the start and end of the fiscal period. When a vehicle is bought, sold or traded during the period, the logbook has the date and the odometer reading of the change.[2]

The simplified logbook: a base year, then three-month samples

Per CRA, a full logbook kept for one complete year establishes a base year. After it, a three-month sample logbook can be used for a later year's business use, as long as the usage is within the same range (within 10%) of the base year's results and the base year remains representative of the vehicle's normal use.[2] The base year is a full 12 months of logbook; only the later years use a three-month sample.

CRA's formula: (Sample year period % ÷ Base year period %) × Base year annual % = Calculated annual business use[2].

CRA's example: a base-year logbook showed 49% business use for the year and 46% for April to June. A later year's April to June sample showed 51%. (51% ÷ 46%) × 49% = 54%, which CRA would accept in the absence of contradictory evidence because it is within 10% of the base year's 49%.[2] In CRA's example, within 10% means the calculated annual business use is no more than 10 percentage points above or below the base year's annual business use: for a 49% base year, not lower than 39% or higher than 59%.[2]

Per CRA, when the calculated annual business use goes up or down by more than 10%, the base year is not an appropriate indicator for that later year. The sample logbook is then reliable only for its own three months, and business use for the rest of the year comes from an actual record of travel or other records. CRA notes that a new base year can be established with a logbook for a new 12-month period.[2]

For an agent, whether a later year stays within that range depends on how much the year's driving changes: a new farm area, a move to another brokerage or team, a different mix of buyer and listing work.

Per CRA, records are generally kept for six years from the end of the tax year they relate to. The full 12-month base-year logbook is kept for six years from the end of the last tax year it is used to establish business use for.[2]

More than one vehicle

Per CRA, a business that uses more than one vehicle has a separate record for each, showing the total and business kilometres driven and the cost to run and maintain it, and each vehicle's expenses are calculated separately.[2]

What CRA lists as deductible, and what isn't business driving

CRA lists these motor vehicle expenses, deductible for the business part of the vehicle's use[1]:

• Licence and registration fees
• Fuel and oil
• Electricity for a zero-emission vehicle
• Insurance
• Interest on money borrowed to buy the vehicle (limited, see the 2026 limits)
• Maintenance and repairs
• Leasing costs (limited, see the 2026 limits)

Capital cost allowance on an owned vehicle isn't in this list: it goes on line 9936[1]. Business parking and supplementary business insurance count in full, as above.

Driving between home and the brokerage

CRA's current motor vehicle pages count the kilometres driven to earn income as business use[1], and don't address trips between home and a place of business for the self-employed in general. CRA's archived interpretation bulletin IT-521R, which CRA no longer updates, says travel between home and the place of business is not deductible unless the home is the base of business operations, and that a home is normally not the base when there is an office or other fixed place of business elsewhere[11]. How that applies to a given agent (a desk at the brokerage, or a home office as the base) is a question for an accountant.

Personal trips, and fines

• Personal driving, including the personal part of a trip that mixes errands and business, isn't driving to earn income[1].
• CRA lists "most fines and penalties imposed after March 22, 2004, under the law of Canada, a province, or a foreign country" among the amounts not to include in expenses[10]. That covers traffic tickets.

The 2026 limits: capital cost, leasing and interest

The Department of Finance Canada sets these limits each year for passenger vehicles[6]. They apply on top of the business-use part: the limit comes first, then the business share.

• Class 10.1 capital cost ceiling: $39,000 before tax, for a passenger vehicle (new or used) bought in 2026, up from $38,000 in 2025[6][7]. A vehicle that costs more goes into Class 10.1 at the ceiling, and CCA is worked out on the ceiling, not the price[5].
• Zero-emission passenger vehicle (Class 54) ceiling: $61,000 before tax[6][5].
• Leasing: $1,100 a month before tax, for leases entered into in 2026[6]. CRA's leasing chart works out two amounts, one from this monthly limit and one from the manufacturer's list price, and the eligible leasing cost is the lower of the two[8].
• Interest: $350 a month on money borrowed to buy a passenger vehicle, for loans entered into in 2026, the same as in 2025[6]. CRA works it out by the day: the deduction is the lower of the interest payable and the monthly limit ÷ 30 for each day interest was payable in the year[1].

Class 10 and Class 10.1 are both 30% classes[5]. In the year property is bought, CRA's guide usually limits CCA to half of the year's net additions (the half-year rule), and says the rule does not apply to accelerated investment incentive property, zero-emission vehicles, Class 56 property or, under proposed changes, reaccelerated investment incentive property[4]. Under the proposed changes, the accelerated incentive covers qualifying property acquired before January 1, 2025, and the reaccelerated incentive covers qualifying property acquired on or after that date and available for use before 2034[12]. Which of these applies to a particular vehicle is a question for an accountant.

Class 10, Class 10.1 and Class 54

• Class 10 (30%): motor vehicles and some passenger vehicles, including a passenger vehicle that costs no more than the year's ceiling[5].
• Class 10.1 (30%): a passenger vehicle not included in Class 10, that is, one costing more than the ceiling. CRA: "List each Class 10.1 vehicle separately."[5] Per CRA's guide, recapture of CCA and terminal loss do not apply to passenger vehicles in Class 10.1 (unless they were designated immediate expensing property)[4]. In the year a Class 10.1 vehicle is sold, the guide allows 50% of the CCA (the half-year rule on sale) when the vehicle was owned at the end of the previous fiscal period[4].
• Class 54 (30%): zero-emission vehicles acquired after March 18, 2019, that would otherwise be in Class 10 or 10.1, with the capital cost limit above. These vehicles may qualify for an enhanced first-year CCA that is being phased out[5].

Most sedans, SUVs and crossovers used in real estate work are passenger vehicles in CRA's terms. A pickup or van used to carry signs and staging may not be. CRA's type of vehicle page sets out the tests.

GST/HST input tax credits on a vehicle

An agent registered for GST/HST can claim input tax credits (ITCs) for the GST/HST paid on vehicle costs. For an individual or a partnership, which covers most self-employed agents, RC4022 sets out how this works for a passenger vehicle[13]:

• Individuals and partnerships usually claim ITCs for a passenger vehicle based on the capital cost allowance.
• Used 90% or more in commercial activities: a full ITC.
• Used 10% or less: no ITC.
• In between: the ITC is worked out each year from the part of the year's CCA that relates to the commercial activities, multiplied by a tax factor: 5% GST: 5/105; 13% HST: 13/113; 14% HST: 14/114; 15% HST: 15/115.
• The part of a passenger vehicle's cost eligible for an ITC is limited to the capital cost limitation, the Class 10.1 ceiling above ($39,000 before tax for a vehicle bought in 2026[6]).

Running costs

For running costs such as fuel, maintenance and repairs, and licence and registration fees, CRA's vehicle guidance limits the ITC to the GST/HST on the business part when the vehicle is used for business and personal driving[14]. RC4022's general rule allows the full GST/HST as an ITC on an operating expense used 90% or more in commercial activities, and otherwise a fair and reasonable split used consistently through the year[13]. These rules are technical, and an accountant familiar with GST/HST can apply them to a specific vehicle.

Realtor scenarios

CRA's rules apply to every self-employed person. These are the ones a real estate agent meets most often. Each item describes how the rules read, not what to claim: that is a conversation with an accountant.

Showings and listing visits

Driving to a showing, a listing appointment or an inspection is driving to earn income[1]. A logbook entry for it records the date, destination, purpose and kilometres[2].

Open houses

Driving to an open house you host is driving to earn income. A visit to another agent's open house for market research is too when its purpose is recorded; a drop-in with no business purpose isn't.

The brokerage

See driving between home and the brokerage above: the archived bulletin treats a home that isn't the base of business operations differently from one that is[11].

Trips that mix business and errands

Only the kilometres driven to earn income count[1]. A trip that takes in a listing visit, a grocery stop and a school pickup has a business part and a personal part, and the logbook records the business part.

Vehicle wraps and signs

Advertising goes on line 8521 of T2125[9]. A wrap or sign advertising the business doesn't change the vehicle's business-use share: a personal errand in a wrapped vehicle is still personal driving.

GST/HST by province, and Quebec

The federal rules above apply across Canada. The GST/HST rate, which sets the dollar amount of an ITC, depends on the province:

• 13% HST: Ontario.
• 14% HST: Nova Scotia.
• 15% HST: New Brunswick, Newfoundland and Labrador and Prince Edward Island.
• 5% GST only: Alberta, British Columbia, Manitoba, Northwest Territories, Nunavut, Saskatchewan and Yukon. Provincial sales tax (where it applies, for example PST in British Columbia, Saskatchewan and Manitoba) isn't recovered through GST ITCs.

For GST/HST registration, including the small supplier threshold and filing frequency, see the HST/GST registration guide for Canadian real estate agents.

Quebec

Quebec administers its own Quebec Sales Tax (QST) alongside GST, and Revenu Québec has its own vehicle rules on top of the federal ones. Agent Runway isn't yet available in Quebec, and this article doesn't cover QST. Revenu Québec's published guidance and a Quebec accountant cover it.

Tracking it through the year

Rebuilding a year of vehicle costs in April runs into two gaps: missing receipts, and a kilometre record that was never kept. Recording costs as they happen and trips as they are driven keeps both.

In Agent Runway, vehicle costs are recorded under Expenses → Vehicle in their own categories (lease or rental payments, insurance, fuel, repairs and maintenance, business parking, supplementary business insurance) and add up to T2125 line 9281. The business-use share comes from CRA's logbook under Expenses → Mileage (trips, odometer readings, and a full-year logbook or a base year with three-month samples), or from the share you declare in Settings until the logbook covers the year. It applies to every vehicle cost except business parking and supplementary business insurance, which count in full. Capital cost allowance is worked out separately and goes on line 9936. These are estimates: what goes on T2125 is what you and your accountant settle at filing time.

The free Canadian Realtor Tax Estimator takes your total business expenses for the year (the business part of your vehicle costs is part of that total) and shows the estimated income tax, CPP and GST/HST.

For how line 9281 fits with the other T2125 lines, see the T2125 guide for Canadian real estate agents.